Unjust Enrichment Example: Everything You Need to Know
An unjust enrichment example, such as receiving payment for something not completed, involves one party benefiting at the expense of the other party in an unfair circumstance.3 min read
An unjust enrichment example, such as receiving payment for something not completed, involves one party benefiting at the expense of the other party in an unfair circumstance.
What is Unjust Enrichment?
When one party benefits at another's expense in an unjust situation, there is unjust enrichment involved. The elements of the enrichment include a payment or transfer of property between the two parties. It's typically used to describe situations where one party either in error or accidentally receives benefits they should not keep. Those deemed unjustly enriched must reverse the position and pay the monetary value of the received benefit, also known as restitution.
If for some reason the other party refuses to make restitution, you can file a civil suit. However, proving unjust enrichment to a court can be difficult to accomplish due to unique circumstances and factors. Each case has its own facts, so the principles aren't as clear as others. A lawyer can provide you assistance in dealing with an unjust enrichment claim.
Unjust Enrichment Examples
Unjust enrichment typically occurs in situations involving a breach of contract when one party provides goods and services and expects payment only to find that the other party refuses to pay.
For instance, a property owner might hire a contractor to install carpet in their home. The property owner terminates the contract prematurely due to a breach and only have several rooms in the house carpeted. The property owner refuses to pay for the partially completed work. This results in unjust enrichment because the property owner benefited from the work the contractor did complete.
Another example is if you have two puppies and take them to the groomer for a cleaning and nail clipping. The groomer finishes the work on the first puppy, but something comes up, and he cannot attend to the other puppy. The groomer is unjustly enriched because you paid for both puppies, but only one had been taken care of.
Categories of Unjust Enrichment
To determine whether the benefits received were unjust or not, there must be the presence of at least one of these four categories:
- Duress. The plaintiff transfers benefits after receiving a threat or being persuaded.
- Failure to Provide Consideration. The plaintiff originally wanted to enrich the defendant, but other reasons caused it to not happen. Yet somehow the defendant still benefited.
- Mistake. The plaintiff made a payment to the defendant on accident and wants a refund. The plaintiff can receive restitution.
- Undue Influence. The defendant takes advantage of the plaintiff's trust.
Proof of Unjust Enrichment
Each state might have different definitions of what unjust enrichment is. Most of the time, the states rely on their own set of laws to make that determination, but the courts may use the following questions to make the decision:
- Does the plaintiff request specific types of remedies?
- Did the defendant receive enrichment due to the plaintiff's activity?
- Was the enrichment done at the plaintiff's expense?
From there, the court focuses on whether the enrichment was deemed unfair or unjust. If the defendant benefited at the plaintiff's expense, more than likely the enrichment that occurred was unjust. However, if the plaintiff also received something in return, the enrichment might not be qualified as unjust. Some areas state that the defendant must be aware that he or she is receiving an unjust enrichment in order to provide proof.
Remedies for Unjust Enrichment
In order to resolve unjust enrichment, there are two kinds of remedies: personal and proprietary. Pertaining to personal remedies, the defendant must pay restitution. Proprietary remedies involve instances where the plaintiff encountered damages after agreeing to a contract and the defendant doesn't fulfill the stated obligations. The court awards this option after it decides that the defendant holds a certain interest in property or an asset and benefits from it.
Restitution or Compensation
Although restitution and compensation have similar aspects, there are some key differences between the two when it comes to unjust enrichment. They can affect the total amount that goes to the aggrieved party. Restitution involves money made unjustly by the accused party, and this money must be returned. It can also involve a specific item mistakenly obtained.
Compensation involves a monetary amount based upon what the plaintiff lost instead of how much the defendant gained. If it involves property, the defendant might end up paying the plaintiff for the property's value or based on another type of monetary loss. This type of resolution is typically found in standard breaches of contract.
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